----

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| [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                   |
|--------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |
|                                                                                                                     | For the quarterly period ended March 31, 2010 |
|                                                                                                                     |   |
| [   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                                                                                                     | For the transition period from __________ to __________ |

| 000-17232                                                                                                                                                                                                                                                                             |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Commission File Number                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                  |
| FACT CORPORATION                                                                                                                                                                                                                                                                      |
| (Exact name of registrant as specified in its charter)                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                  |   |
| Colorado                                                                                                                                                                                                                                                                              | 84-0888594 |
| (State or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                        | (I.R.S. Employer Identification No.) |
|                                                                                                                                                                                                                                                                                  |   |
| 1530 – 9th Avenue SE, Calgary, Alberta, Canada                                                                                                                                                                                                                                  | T2G 0T7 |
| (Address of principal executive offices)                                                                                                                                                                                                                                              | (Zip Code) |
|                                                                                                                                                                                                                                                                                  |
|                                              403-693-8004 |
| (Registrant’s  telephone number, including area code)                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                  |
| (Former name, former address and former fiscal year, if changed since last report)                                                                                                                                                                                                    |

|   | Yes [X]  No [  ] |
|--------|--------------------------------------|
|   | Yes [X]  No [  ] |

|   | Yes [  ]  No [  ] |
|--------|-------------------------------------------------|

| Large accelerated filer                       | [  ] | Accelerated filer         | [  ] |
|-----------------------------------------------|----------------|---------------------------|----------------|
|                                          |           |                      |           |
| Non-accelerated filer                         | [  ] | Smaller reporting company | [X]            |
| (Do not check if a smaller reporting company) |           |                      |           |

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|   | Yes [  ] No [X] |
|--------|---------------------------|

|   | Yes [  ]  No [  ] |
|--------|-------------------------------------------------|

| 18,796,328 common shares outstanding as of May 14, 2010.                                                                              |
|---------------------------------------------------------------------------------------------------------------------------------------|
| (Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.) |

----

|     |                                                                                        |   Page |
|----------|---------------------------------------------------------------------------------------------|-------------|
|     | PART I – Financial Information                                                        |        |
| Item 1.  | Financial Statements                                                                        |   3    |
| Item 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |   4    |
| Item 3.  | Quantitative and Qualitative Disclosures About Market Risk                                  |   6    |
| Item 4T. | Controls and Procedures                                                                     |   6    |
|     |                                                                                        |        |
|     | PART II – Other Information                                                           |        |
| Item 1.  | Legal Proceedings                                                                           |   7    |
| Item 1A. | Risk Factors                                                                                |   7    |
| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                                 |   7    |
| Item 3.  | Defaults Upon Senior Securities                                                             |   7    |
| Item 4.  | (Removed and Reserved)                                                                      |   7    |
| Item 5.  | Other Information                                                                           |   7    |
| Item 6.  | Exhibits                                                                                    |   8    |
|     | Signatures                                                                                  |   8    |

----

|                                                         | Page       |
|--------------------------------------------------------------|------------|
| Unaudited Consolidated Financial Statements                  | F-1        |
| Consolidated Balance Sheets                                  | F-2        |
| Consolidated Statements of Operations and Comprehensive Loss | F-3        |
| Consolidated Statements of Cash Flows                        | F-4        |
| Notes to Unaudited Consolidated Financial Statements         | F-5 to F-9 |

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| ASSETS                                                                                                                                                                        |   | March 31,2010 |        |   | December 31,2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-------------|--------|------------------|--------|
| Current Assets                                                                                                                                                                |   |          |        |   |             |   |
| Cash                                                                                                                                                                          |   | $             | 19,850      |   |             | $      | 45,736 |   |
| Inventory                                                                                                                                                                     |   |          | 204,333     |   |             |   | 3,193 |   |
| Accounts receivable                                                                                                                                                           |   |          | 26,472      |   |             |   | 133,915 |   |
| Prepaid expense                                                                                                                                                               |   |          | 9,537       |   |             |   | 4,081 |   |
| Total Current Assets                                                                                                                                                          |   |          | 260,192     |   |             |   | 186,925 |   |
|                                                                                                                                                                          |   |          |        |   |             |   |   |   |
| Property and Equipment                                                                                                                                                        |   |          |        |   |             |   |   |   |
| Intellectual property                                                                                                                                                         |   |          | 687,653     |   |             |   | 749,912 |   |
| Real property (net of accumulated depreciation of $1,148 and $1,071)                                                                                                          |   |          | 285         |   |             |   | 362 |   |
| Total Property and Equipment                                                                                                                                                  |   |          | 687,938     |   |             |   | 750,274 |   |
| Total Assets                                                                                                                                                                  |   | $             | 948,130     |   |             | $      | 937,199 |   |
|                                                                                                                                                                          |   |          |        |   |             |   |   |   |
| Liabilities and Stockholders' Deficiency                                                                                                                                      |   |          |        |   |             |   |   |   |
| Current Liabilities                                                                                                                                                           |   |          |        |   |             |   |   |   |
| Accounts payable and accrued liabilities                                                                                                                                      |   | $             | 606,063     |   |             | $      | 363,673 |   |
| Accounts payable and accrued liabilities (related parties)                                                                                                                    |   |          | 606,953     |   |             |   | 603,451 |   |
| Loan payable (related parties)                                                                                                                                                |   |          | 31,813      |   |             |   | 6,412 |   |
| Loan payable                                                                                                                                                                  |   |          | 5,534       |   |             |   | 2,517 |   |
| Current portion of long-term debt and acquisition cost (Note 3)                                                                                                               |   |          | 181,609     |   |             |   | 168,938 |   |
| Total current liabilities                                                                                                                                                     |   |          | 1,431,972   |   |             |   | 1,144,991 |   |
|                                                                                                                                                                          |   |          |        |   |             |   |   |   |
| Long – Term Liabilities                                                                                                                                                 |   |          |        |   |             |   |   |   |
| 6% Series convertible debenture                                                                                                                                               |   |          | 303,928     |   |             |   | 302,685 |   |
| 8% Series convertible notes                                                                                                                                                   |   |          | 1,258,208   |   |             |   | 1,254,100 |   |
| Acquisition cost payable (Note 3)                                                                                                                                             |   |          | 1,282,184   |   |             |   | 1,337,089 |   |
| Total Long – Term Liabilities                                                                                                                                           |   |          | 2,844,320   |   |             |   | 2,893,874 |   |
|                                                                                                                                                                          |   |          |        |   |             |   |   |   |
| Total Liabilities                                                                                                                                                             |   |          | 4,276,292   |   |             |   | 4,038,865 |   |
|                                                                                                                                                                          |   |          |        |   |             |   |   |   |
| Stockholders' Deficiency                                                                                                                                                      |   |          |        |   |             |   |   |   |
| Class A Common Stock: authorized 100,000,000 shares of no par value; 18,796,328 and 18,706,328 issued and outstanding as at March 31, 2010 and December 31, 2009 respectively |   |          | 23,270,367  |   |             |   | 23,261,326 |   |
| Additional paid in capital                                                                                                                                                    |   |          | 736,142     |   |             |   | 717,563 |   |
| Accumulated other comprehensive income                                                                                                                                        |   |          | 102,122     |   |             |   | 107,852 |   |
| Accumulated deficit                                                                                                                                                           |   |          | (27,436,793 | )      |             |   | (27,188,407 | ) |
| Total Stockholders' Deficiency                                                                                                                                                |   |          | (3,328,162  | )      |             |   | (3,101,666 | ) |
| Total Liabilities and Stockholders' Deficiency                                                                                                                                |   | $             | 948,130     |   |             | $      | 937,199 |   |

----

|                                                                 |   | For the three months endedMarch 31, |       |
|----------------------------------------------------------------------|--------|-------------------------------------|------------|
|                                                                 |   | 2010                                |       |   | 2009 |   |
| Revenues                                                             |   |                                |       |   |   |   |
| Functional food premix                                               |   | $                                   | 204,500    |   |   | $ | 462,234 |   |
| Rental income (net of operating expenses)                            |   |                                | 22,449     |   |   |   | 17,042 |   |
|                                                                 |   |                                | 226,949    |   |   |   | 479,276 |   |
|                                                                 |   |                                |       |   |   |   |   |   |
| Costs of Goods Sold – Functional food premix                   |   |                                | 172,373    |   |   |   | 389,220 |   |
|                                                                 |   |                                |       |   |   |   |   |   |
| Gross Profit                                                         |   |                                | 54,576     |   |   |   | 90,056 |   |
|                                                                 |   |                                |       |   |   |   |   |   |
| Costs and Expenses                                                   |   |                                |       |   |   |   |   |   |
| Legal                                                                |   |                                | (6,218     | ) |   |   | 18,735 |   |
| Consulting fees                                                      |   |                                | 48,867     |   |   |   | 77,811 |   |
| Depreciation and amortization                                        |   |                                | 62,336     |   |   |   | 62,324 |   |
| Other Administrative expenses                                        |   |                                | 171,972    |   |   |   | 46,056 |   |
|                                                                 |   |                                | 276,957    |   |   |   | 204,926 |   |
|                                                                 |   |                                |       |   |   |   |   |   |
| (Loss) from operations                                               |   |                                | (222,381   | ) |   |   | (114,870 | ) |
| Other income and expenses                                            |   |                                |       |   |   |   |   |   |
| Realized gain (loss)  on disposal of marketable securities |   |                                | -          |   |   |   | (32 | ) |
| Tax (Paid) /refunded                                                 |   |                                | -          |   |   |   | - |   |
| Gain on debt forgiveness                                             |   |                                | 12,276     |   |   |   |   |   |
| Interest expense                                                     |   |                                | (38,281    | ) |   |   | (31,313 | ) |
|                                                                 |   |                                | (26,005    | ) |   |   | (31,345 | ) |
|                                                                 |   |                                |       |   |   |   |   |   |
| Provision for income taxes                                           |   |                                | -          |   |   |   | - |   |
|                                                                 |   |                                |       |   |   |   |   |   |
| Net (Loss)                                                           |   | $                                   | (248,386   | ) |   | $ | (146,215 | ) |
|                                                                 |   |                                |       |   |   |   |   |   |
| Net (Loss) per Common Share, basic and diluted                       |   | $                                   | (0.01      | ) |   | $ | (0.01 | ) |
|                                                                 |   |                                |       |   |   |   |   |   |
| Weighted Average Number of Common Shares Used in calculation         |   |                                | 18,789,328 |   |   |   | 17,154,406 |   |
|                                                                 |   |                                |       |   |   |   |   |   |
| Comprehensive loss                                                   |   |                                |       |   |   |   |   |   |
| Net loss                                                             |   | $                                   | (248,386   | ) |   | $ | (146,215 | ) |
| Foreign currency translation adjustment                              |   |                                | (5,730     | ) |   |   | 3,843 |   |
| Comprehensive loss                                                   |   | $                                   | (254,116   | ) |   | $ | (142,372 | ) |

----

|                                                      |   | For the three months endedMarch 31, |     |
|-----------------------------------------------------------|--------|-------------------------------------|----------|
|                                                      |   | 2010                                |     |   | 2009 |   |
| Cash From Operating Activities:                           |   |                                |     |   |   |   |
| Net (loss)                                                |   | $                                   | (248,386 | ) |   | $ | (146,215 | ) |
| Reconciling adjustments                                   |   |                                |     |   |   |   |   |   |
| Depreciation, depletion and amortization                  |   |                                | 62,336   |   |   |   | 62,324 |   |
| Accrued interest                                          |   |                                | 31,682   |   |   |   | 31,313 |   |
| Amortization of convertible bonds discount                |   |                                | 5,350    |   |   |   | - |   |
| Stock based compensation                                  |   |                                | 5,120    |   |   |   | - |   |
| Realized loss on securities                               |   |                                | -        |   |   |   | 32 |   |
| Changes in operating assets and liabilities               |   |                                |     |   |   |   |   |   |
| Accounts receivable                                       |   |                                | 102,091  |   |   |   | (46,981 | ) |
| Inventory                                                 |   |                                | (201,140 | ) |   |   | 69,856 |   |
| Prepaid Expense                                           |   |                                | (5,441   | ) |   |   | (1,982 | ) |
| Payroll liabilities                                       |   |                                | 1,046    |   |   |   | - |   |
| Accounts payable and accrued expenses                     |   |                                | 212,962  |   |   |   | (47,189 | ) |
| Net Cash Flows Used In Operating Activities               |   |                                | (34,380  | ) |   |   | (78,843 | ) |
|                                                      |   |                                |     |   |   |   |   |   |
| Cash From Financing Activities:                           |   |                                |     |   |   |   |   |   |
| Loan proceeds – related party                       |   |                                | 25,100   |   |   |   | - |   |
| Loan proceeds                                             |   |                                | 2,938    |   |   |   | - |   |
| Proceeds from sale of common stock                        |   |                                | 22,500   |   |   |   |   |   |
| Reduction to acquisition cost payable                     |   |                                | (42,235  | ) |   |   | (23,380 | ) |
| Net Cash Flows Provided By (Used In) Financing Activities |   |                                | 8,303    |   |   |   | (23,380 | ) |
|                                                      |   |                                |     |   |   |   |   |   |
| Foreign currency translation adjustment                   |   |                                | 191      |   |   |   | (121 | ) |
|                                                      |   |                                |     |   |   |   |   |   |
| Net change in cash and cash equivalents                   |   |                                | (25,886  | ) |   |   | (102,344 | ) |
| Cash at beginning of period                               |   |                                | 45,736   |   |   |   | 230,341 |   |
| Cash at end of period                                     |   | $                                   | 19,850   |   |   | $ | 127,997 |   |
|                                                      |   |                                |     |   |   |   |   |   |
| Supplemental disclosure of cash flow information:         |   |                                |     |   |   |   |   |   |
| Interest paid                                             |   |                                | -        |   |   |   | - |   |
| Income taxes paid (refund)                                |   |                                | -        |   |   |   | - |   |
|                                                      |   |                                |     |   |   |   |   |   |
| Supplemental non-cash financing activity:                 |   |                                |     |   |   |   |   |   |
| Total:                                                    |   | $                                   | -        |   |   | $ | - |   |

----

----

|                                          |   | March 31, 2010 |      |   | December 31, 2009 |   |
|-----------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
| 8% unsecured convertible notes, at face value |   | $              | 1,304,172 |   |              | $      | 1,304,172 |   |
| Less: unamortized discount                    |   |           | (45,964   | )      |              |   | (50,072 | ) |
| Carrying value                                |   | $              | 1,258,208 |   |              | $      | 1,254,100 |   |

|                          |   | Three months ended March 31, |   |
|-------------------------------|--------|------------------------------|--------|
|                          |   | 2010                         |   |   | 2009 |   |
| Amortization of debt discount |   | $                            | 4,188  |   |   | $ | - |   |
| Interest at contractual rate  |   |                         | 30,798 |   |   | $ | - |   |

----

|                                            |   | March 31, 2010 |    |   | December 31, 2009 |   |
|-------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
| 6% secured convertible debenture, at face value |   | $              | 317,517 |   |              | $      | 317,517 |   |
| Less: unamortized discount                      |   |           | (13,589 | )      |              |   | (14,832 | ) |
| Carrying value                                  |   | $              | 303,928 |   |              | $      | 302,685 |   |

|                          |   | Three months ended March 31 |   |
|-------------------------------|--------|-----------------------------|--------|
|                          |   | 2010                        |   |   | 2009 |   |
| Amortization of debt discount |   | $                           | 1,243  |   |   | $ | - |   |
| Interest at contractual rate  |   |                        | 5,941  |   |   | $ | - |   |

|                              |   | March 31, 2010 |    |   | December 31, 2009 |   |
|-----------------------------------|--------|----------------|---------|--------|-------------------|--------|
| Accounts payable – trade    |   | $              | 524,152 |   |              | $      | 305,634 |   |
| Accounts payable – interest |   |           | 70,100  |   |              |   | 38,874 |   |
| Accrued expense                   |   |           | 8,500   |   |              |   | 16,900 |   |
| Payroll liabilities               |   |           | 3,311   |   |              |   | 2,265 |   |
|                              |   | $              | 606,063 |   |              | $      | 363,673 |   |

----

|                               |   | Class AWarrant |   |   | Class BWarrant |   |
|------------------------------------|--------|----------------|--------|--------|----------------|--------|
| Warrants to purchase common stock: |   |           |   |   |           |   |
|   Strike price           |   | $              | 0.30   |   |           | $      | 0.35 |   |
|   Volatility             |   |           | 177    | %      |           |   | 177 | % |
|   Term (years)           |   |           | 1.00   |   |           |   | 2.00 |   |
|   Risk-free rate         |   |           | 0.40   | %      |           |   | 1.03 | % |
|   Dividends              |   |           | -      |   |           |   | - |   |

| (i)   | Transactions with International Securities Group Inc. |
|-----------------|-------------------------------------------------------|

| (ii)   | Transactions with Directors and Officers |
|------------------|------------------------------------------|

----

| (ii)   | Transactions with Directors and Officers (continued) |
|------------------|------------------------------------------------------|

| (iii)   | Transactions with others |
|-------------------|--------------------------|

----

----

|                                    |   | Three months ended March 31, |    |   |   |   |
|-----------------------------------------|--------|------------------------------|---------|--------|--------|--------|
|                                    |   | 2010                         |    |   | 2009   |   |   | Change |   |
| Net revenue from Functional food premix |   | $                            | 204,500 |   |   | $      | 462,234 |   |   |   | (55.75 | %) |
| Gross Profit on Functional food premix  |   | $                            | 32,127  |   |   | $      | 73,014 |   |   |   | (56.00 | %) |
| Gross Profit Rate                       |   |                         | 15.71   | %      |   |   | 15.80 | % |   |   | (0.57 | %) |

----

----

| Name & Address                                       | Number of Shares Issued                                                                                                                                                                                                                                                                                            | Reason for Issuance |
|----------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|
| Allan Carter23414 Torre CircleBoca Raton, FL 33433  | 90,000 Units of Class A common stock at $0.25 per Unit, including one Class A and one Class B Warrant. The Class A and Class B warrants allow for the purchase of Class A common stock at US$0.30 per share within one (1) calendar year and at $0.35 per share within two (2) calendar years, respectively.  | Private Placement   |

----

| Number   | Description                                                                                                                  | Reference                                                                                                                                                                    |
|----------|------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1(i)   | Articles of Incorporation, as amended                                                                                        | Incorporated by reference to the Exhibits previously filed with Capital Reserve Corporation’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 1990 |
| 3.1(ii)  | Articles of Amendment to Articles of Incorporation, filed with the State of Colorado Secretary of State on November 26, 2001 | Incorporated by reference to the Exhibits previously filed with FACT Corporation’s Annual Report for Form 10-KSB for the fiscal year ended December 31, 2002           |
| 3.1(iii) | Articles of Amendment to Articles of Incorporation, filed with the State of Colorado Secretary of State on February 8, 2002  | Incorporated by reference to the Exhibits previously filed with FACT Corporation’s Annual Report for Form 10-KSB for the fiscal year ended December 31, 2002           |
| 3.2      | Amended Bylaws                                                                                                               | Incorporated by reference to the Exhibits previously filed with Capital Reserve Corporation’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 1994 |
| 10.1     | 2008 Stock Option and Stock Award Plan                                                                                       | Incorporated by reference to the Exhibits previously filed with FACT Corporation’s Definitive 14C on August 22, 2008                                                   |
| 31.1     | Section 302 Certification - Principal Executive Officer and Principal Financial Officer                                      | Filed herewith                                                                                                                                                               |
| 32.1     | Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002        | Filed herewith                                                                                                                                                               |

|   |         | FACT CORPORATION |
|--------|--------------|------------------|
|   |         |             |   |
| Date:  | May 17, 2010 | By:              | /s/ Jacqueline Danforth |
|   |         | Name:            | Jacqueline R. Danforth |
|   |         | Title:           | President (Principal Executive, Financial and Accounting Officer) |

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